Property Transfer City and County Taxes
Buying or selling a home is an exciting experience, but it also comes with several costs. One of these costs is the property transfer tax. Whether you’re involved in a property transaction, understanding transfer taxes is crucial to anticipate costs and financial implications.
In this blog, we will break down what property transfer taxes are, how much they cost, who pays them, and how they vary in different areas of Los Angeles County.
What Is a Property Transfer Tax?
A property transfer tax is a fee charged by the city or county when the ownership of a property changes from one person or entity to another. It is typically calculated as a percentage of the property’s sale price and must be paid when the deed is transferred to the new owner.
These taxes are often overlooked by buyers and sellers, but they can be a significant expense. Understanding how they work can help you plan better and avoid unexpected costs.
Who Pays the Property Transfer Tax?
The responsibility for paying the property transfer tax depends on the terms negotiated between the buyer and the seller. In most cases in California, the seller pays this tax. However, in some situations, the buyer and seller may agree to split the cost.
How Much Are Property Transfer Taxes?
In Los Angeles County, the standard county transfer tax is $1.10 per $1,000 of the sale price. In addition to this county tax, some cities impose their own transfer taxes, making the total cost higher in some areas.
Here’s a breakdown of transfer taxes in different locations:
Los Angeles City
- County Transfer Tax: $1.10 per $1,000
- City Transfer Tax: $4.50 per $1,000
- Total: $5.60 per $1,000
For example, if you sell a home in Los Angeles for $1,000,000, the transfer tax would be:
- County tax: $1,100
- City tax: $4,500
- Total transfer tax: $5,600
In April 2023, Los Angeles introduced a new “Mansion Tax” on properties sold for over $5 million. This tax is 4% on sales between $5 million and $10 million, and 5.5% on sales over $10 million. This means that luxury homes are subject to much higher taxes.
Woodland Hills
Woodland Hills is part of Los Angeles, so the same Los Angeles city and county transfer taxes apply:
- Total Transfer Tax: $5.60 per $1,000 of the sale price
If you sell a home in Woodland Hills for $750,000, the transfer tax would be $4,200 ($750,000 ÷ 1,000 × $5.60).
Calabasas
Calabasas is in Los Angeles County but does not have an additional city transfer tax. This means only the county tax applies:
- County Transfer Tax: $1.10 per $1,000
- Total Transfer Tax: $1.10 per $1,000
For example, if you sell a home in Calabasas for $2,000,000, the transfer tax would be $2,200 ($2,000,000 ÷ 1,000 × $1.10).
Beverly Hills
Beverly Hills is an independent city within Los Angeles County and does not have an additional city transfer tax. Only the county tax applies:
- County Transfer Tax: $1.10 per $1,000
- Total Transfer Tax: $1.10 per $1,000
If you sell a home in Beverly Hills for $5,000,000, the transfer tax would be $5,500 ($5,000,000 ÷ 1,000 × $1.10).
However, if the home sells for more than $5 million, it may be subject to the Los Angeles Mansion Tax if it is classified under the city’s jurisdiction.
How to Calculate Your Property Transfer Tax
To calculate your transfer tax, use this formula: (Sale Price ÷ 1,000) × Transfer Tax Rate
Example calculations:
- Los Angeles ($1,500,000 sale price): $1,500 × $5.60 = $8,400
- Woodland Hills ($800,000 sale price): $800 × $5.60 = $4,480
- Calabasas ($1,200,000 sale price): $1,200 × $1.10 = $1,320
- Beverly Hills ($3,000,000 sale price): $3,000 × $1.10 = $3,300
How Are Property Transfer Taxes Paid?
When a home is sold, the property transfer tax is typically paid at closing through the escrow company. The tax amount is deducted from the seller’s proceeds before they receive the remaining balance.
Are There Any Exemptions?
Certain transactions may be exempt from property transfer taxes. These include:
- Gifts or inheritance (if no money is exchanged)
- Transfers between spouses
- Transfers to a trust or business entity (in some cases)
- Foreclosure sales
If you think you might qualify for an exemption, consult with a real estate attorney or tax professional.
Conclusion
Understanding property transfer taxes is crucial when buying or selling a home in Los Angeles, Woodland Hills, Calabasas, and Beverly Hills. These taxes vary by location, and knowing what to expect can help you plan financially. If you are selling a property, it’s important to include transfer tax costs in your calculations to avoid surprises at closing.
If you need help with your property transaction, consider speaking with a real estate agent, tax consultant, or attorney to ensure you handle the transfer smoothly and efficiently.
By being prepared, you can confidently navigate the process and make informed financial decisions when buying or selling your home!
Rana Real Estate Group is a trusted name in real estate, offering expert assistance for all your property needs. Whether you’re buying, selling, or investing, their experienced team provides tailored solutions and personalized service to help you achieve your goals. With a focus on integrity and transparency, they guide you through every step of the process, ensuring a smooth and successful transaction. Whether you’re a beginner or seasoned in real estate, Rana Real Estate Group is here to support you every step of the way.
Rana Khanjani, MBA
Specializing in Commercial, Residential, and Land